Perspective2006 was a crappy year right? Management missed projections and timelines (say a few times). Sure, lots went wrong. but then again, the tailings dam is not the responsibility of ARG, but El Teniente (Codelco).
But for such a "disastrous" 2006, ARG gonna end up with EPS of around US$0.35 (excluding special gain from CHD).
Hello?!?!?!?!?
Copper averaged around $3.25/lb. or so in 2006.
Assuming copper is at US$2.50/lb.in 2007, ARG should make around US$0.27/share based on processing the fresh tailings only (assuming no Colihues).
How can one say, estimates and target price is "Blue-Sky"?
Within a year, ARG likely ramping up Colihues, which would double production. That could mean annualized EPS of US$0.60.
So how is C$3.50/share target "out-of-line"? No way.
You talk about 5X EPS for AUR and others. Well compare apples-to-apples. If copper at US$2.50, AUR would be trading at around 10X EPS. At US$3.50/lb. copper it is 5X.
If you use US$3.50/lb. copper, ARG's EPS for just fresh tailings would be US$0.50/share. Colihues at full ramp-up would be an insane US$1.00/share.